- Indian Rupee (INR) is falling after a flat finish yesterday
- India & the US are still working towards a trade deal
- US Dollar (USD) is falling versus major peers
- FIMC minutes showed a wide division between policymakers
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after a flat finish yesterday. The pair was unchanged in the previous session, settling on Tuesday at 85.76. At 20:30 UTC, USD/INR trades -0.09% lower at 85.68 and traded in a range of 85.62 to 85.90.
Indian rupee is edging lower as trade tariffs and trade deals remain in focus. Earlier this week, President Trump said that he was close to finalising a trade deal that would give India a reprieve from 26% reciprocal tariffs. However, yesterday, Trump said the injected faced an additional 10% tariff alongside other members of BRICS, a bloc of emerging economies that Trump considers to be anti-American.
Trump’s threat came following a 2-day BRICS summit in Brazil. India has refrained from responding publicly, reflecting the fine line that India is trying to walk to maintain its relationship with Washington.
This week, Trump also threatened 50% tariffs on Copper imports and tariffs on semiconductors and pharmaceuticals.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -0.03% to 97.49, after two days of gains.
The US dollar was modestly lower on Wednesday but still hovers around a two-week high as traders digest the latest Trade tariff developments, along with the minutes from the FOMC meeting.
The minutes from the Federal Reserve’s June meeting showed that most officials still expect to cut interest rates this year, though views remain divided.
Some policymakers see a rate cut as soon as July, whereas other believes that the Fed may not cut a tool this year. Policymakers were also divided on the inflationary impact of tariffs.
Following the meeting, the markets continue to price in 225 basis point rate cuts in 2025, with September seen as the most likely date for the first reduction.